Quote:
Originally Posted by Samonadreau
^So in this scenario though, you need to look at $ value, not percent.
Let's say that now because there was a tax added to the original cost, it went up by $0.25 to $6.25.
Now you're being told that only $0.25 is additional cost is from the tax. Now that $6.25 gets marked up to $12.50. Nothing in the markup was included in what was reported as being the total cost to the consumer from the tax and you are being told only $0.25 cost was added because of the tax, but in reality, $0.50 was total final cost added from the tax.
In this case you are being told only an extra $0.25 came out of your pocket from the tax but actually $0.50 did.
So the effect on inflation is twice as much as what was first added as tax.
Government got $0.25 in special tax. Customer pays $0.50 extra.
Just because percentages stay the same doest mean that additional costs from markups or other indirect costs to the customer have been factored in for how much of the final cost was from that initial tax.
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Inflation is measured as a %. If the Carbon Tax is attributed to .1% inflation it affects the finished good and the retail price equally. You already accounted for the affect you describe in the primary vs secondary consideration. You don’t get to double again for no reasons.